Agricultural chemicals company Mosaic (MOS) hasn’t had a great few years, but seemed like a stable bet in a world where the overall population is growing all the time and farming enough food for all those people is becoming increasingly difficult.
But in July, Russia’s Uralkali — a similar business — disrupted one of the world’s largest agricultural chemical partnerships by ending a joint venture … announcing plans to go it alone, and thus flood the market with more product. Because of a huge production jump, then, global prices for the fertilizer potash are expected to decline by as much as 25% in the next year or so.
Although half a world away, the news was big and Mosaic got caught up in the mess this July. MOS saw a sharp selloff in late July as a reslut, giving up more than 20% in just a few sessions.
Mosaic is trying to adapt, slashing its outlook and its production in reaction to the news. But it could take a few more months for this to shake out, as the agricultural chemicals space remains very much in flux from the landmark news this summer.